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Citation: 2003TCC330
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Date: 20030513
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Docket: 2002-4674(IT)I
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BETWEEN:
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WILLIAM PATRICK HORNELL,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Beaubier, J.T.C.C.
[1] This appeal pursuant to the
Informal Procedure was heard at Kamloops, British Columbia
on May 1, 2003. The Appellant testified and called Todd Harding,
a Programme Officer employed by Human Resources Development
Canada at all material times.
[2] Paragraphs 5 to 12 inclusive of
the Reply to the Notice of Appeal read:
5. In
computing income for the 2001 taxation year the Appellant
deducted medical expenses in the amount of $54,886.04 and tuition
fees in the amount of $12,257.94.
6. The
Minister of National Revenue (the "Minister") initially
assessed the Appellant for the 2001 taxation year on June 10,
2002 and allowed medical expenses of $27,418.15 and tuition fees
in the amount of $10,995.00.
7 In so
assessing the Appellant for the 2001 taxation year, the Minister
relied on the following assumptions of fact:
a) the facts
admitted above;
b) the
Appellant paid a total of $1,262.00 (the "Education
Amounts") to Prometric for examination fees;
c) Prometric
is located in the United States;
d) Prometric
is not a university and does not provide courses leading to a
degree;
e) the
Appellant was not enrolled in full-time attendance at
Prometric;
f) the
Appellant incurred expenses totalling $27,467.89 (the
"Medical Amounts") for the purchase of software and web
based training;
g) the Medical
Amounts were not paid in respect of a medical expense as
described in subsection 118.2(2) of the Income Tax Act
(the "Act");
h) the Medical
Amounts were not paid in respect of any equipment or device
prescribed by section 5700 of the Income Tax Regulations
(the "Regulations"); and
i) the
Medical Amounts were not paid as tuition fees to educational
institutions in Canada that are universities providing courses
leading to a degree.
B. ISSUE
TO BE DECIDED
8. The issue
is whether the Appellant is entitled to deduct the Education
Amounts and the Medical Amounts in the 2001 taxation year.
C.
STATUTORY PROVISIONS RELIED ON
9. He relies
on sections 118.2, 118.5 and 118.6 and subsection 248(1) of the
Act, as amended for the 2001 taxation year and on section
5700 of the Regulations, as amended.
D.
GROUNDS RELIED ON AND RELIEF SOUGHT
10. He submits that the
Appellant is not entitled to deduct the Education Amounts since
they were paid to an institution located outside of Canada that
was not a university providing courses leading to a degree as
required by section 118.5 of the Act.
11. He submits that the
Medical Amounts are not deductible as medical expenses in the
2001 taxation year pursuant to any of the provisions of section
118.2 of the Act or section 5700 of the
Regulations.
12. He submits further
that the Appellant is not entitled to deduct the Medical Amounts
as tuition fees are (sic) they were paid to institutions outside
of Canada that were not universities providing courses leading to
a degree.
He requests that the appeal be dismissed.
[3] Assumptions 7(a) to (e) inclusive
were proved to be correct. As a result paragraph 10 is correct
and the appeal is dismissed respecting the $1,262 education
amounts.
[4] At the conclusion of the Hearing,
the Respondent admitted to the Appeal respecting the following
amounts:
a)
Atiga
$ 205.00
b)
Duxbury
$ 612.25
c)
Snowburger
$ 147.25
and the appeal is allowed respecting these sums.
[5] This then leaves the
Appellant's medical expense claims respecting medical
amounts, which the Court finds are not deductible as
"tuition fees" for the reasons set out in paragraph 12
of the Reply to the Notice of Appeal. These constitute two
categories: software items and study materials. To be claimable,
they must fall within Section 118.2 of the Income Tax Act (the
"Act").
[6] Paragraphs 118.2(2)(m)
reads
(2) For the purposes
of subsection (1), a medical expense of an individual is an
amount paid ....
(m) [prescribed
devices] - for any device or equipment for use by the patient
that
(i) is of a
prescribed kind,
(ii) is prescribed
by a medical practitioner,
(iii) is not described in
any other paragraph of this subsection, and
(iv) meets such conditions
as may be prescribed as to its use or the reason for its
acquisition,
to the extent that the amount so paid does not exceed the
amount, if any, prescribed in respect of the device or
equipment;
...
The applicable portions of Regulation 5700 read:
5700. For the purposes of paragraph 118.2(2)(m) of the
Act, a device or equipment is prescribed if it is a
....
(l) optical
scanner or similar device designed to be used by a blind
individual to enable him to read print;
...
(o) device or
equipment, including a synthetic speech system, braille printer
and large print-on-screen device, designed exclusively to be used
by a blind individual in the operation of a computer;
[7] None of the items remaining in
question were "prescribed" or designed
"exclusively" to be used by a blind individual in the
operation of a computer. Moreover, the software material could
more properly be described as a study aid. None of the items
remaining in question were necessary for the Appellant's
training on courses. Rather, they were extras that a person who
had money would buy, but that were not necessary.
[8] In the course of the Hearing, the
Appellant raised the possibility that the assessments in appeal
discriminated against him on account of his blindness. They did
not. Rather, Canada Customs and Revenue Agency ("CCRA")
treated him as they treat all other Canadians, blind or not.
[9] Therefore, the appeal is allowed
only in respect to the items described in paragraph [4].
Signed
at Saskatoon, Saskatchewan, this 13th day of May 2003.
J.T.C.C.
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